Tags

, , , , , , , ,

If one word is preached in auctioneer circles it’s “discretion.” For example, discretion to reopen the bid (or not,) or withdraw the property (or not,) or cancel the auction (or not,) or dispose of lots (or not,) or put certain lots up for online bidding (or not,) or even treat an absolute auction as with reserve (or not), etc.

Specifically, the law largely provides auctioneers have the discretion to reopen the bid (or not) under particular conditions. We think it’s rarely a good idea to reopen the bid after, “Sold!” but others hold auctioneers should use their discretion — and capriciously and/or arbitrarily reopen the bid — which is an absolutely terrible idea.

Steve Proffitt wrote about such discretion, and I’ve included one such writing here. In short, Steve was not a fan and neither am I. As Steve notes (in part) “an auctioneer with specifically agreed-upon authority in a contract provides what the auctioneer is seeking while avoiding the risk that discretion carries.”

The bottom line is that discretion is a poor means for gaining authority. A much clearer and safer approach is a contract that spells out the authority that an auctioneer wants. Having a consignor cloak an auctioneer with specifically agreed-upon authority in a contract provides what the auctioneer is seeking while avoiding the risk that discretion carries. This is because both parties fully understand from the beginning exactly what the auctioneer is and is not authorized to do, and no one will be able to claim subsequent surprise over what ultimately is done.

Steve Proffitt, 2015

It’s difficult to restate anything Steve points out here and improve on it. What’s so wrong with outlining in the contract the exact authority (other than discretion) the auctioneer has? In regard to our prior argument, why not “Auctioneer is to reopen the bid …” or “Auctioneer is to not reopen the bid …?” In this respect, it would certainly make sense to never reopen the bid versus always reopen the bid.

We’ve consistently held discretion is usually ill-advised. It’s nice (but not a surprise) to know Steve Proffitt felt the same way. Maybe a good idea to take a look at that contract to see how much discretion you can remove from it, and replace it with specific duties and responsibilities?

Lastly, do auctioneers need to be flexible — adaptable? Circumstances could dictate an auctioneer needs to “change course?” We would hold that occasionally, auctioneers should well use “reasonable care” to make alterations to the plan — sell outside before it rains, and then inside during the thunderstorm, for example. The issue isn’t that there can’t be any discretion, but that auctioneers typically want (and have) far too much.

Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.